ET:Gold inches lower on flat dollar ahead of Fed minutes
LONDON: Gold edged down on Wednesday as investors reaped profits after a rally to 3-1/2 month highs and as the dollar steadied ahead of the Federal Reserve's minutes of its January meeting, while Asian physical buying subsided.
"The market is very cautious as it is awaiting the Fed minutes to be released later today and there is also lower demand out of China and Asia in general," MKS SA senior vice president Bernard Sin said.
"Based on the technical environment though the rally may not be over, because the short-term trend is still bullish and we are building higher lows ... at times, it looks overbought but any retracement looks healthy."
Spot gold eased 0.1 per cent to $1,319.40 an ounce by 1102 GMT. Bullion has risen around 9 per cent so far this year and touched $1,332.10 an ounce on Tuesday, the strongest since Oct. 31, before shedding gains.
Technically, near-term resistance levels for spot gold stand at $1,338 and the July high of $1,348, analysts said.
US gold futures slipped 0.4 per cent to $1,319.30 an ounce.
Investors have been seeking shelter in gold on fears of slowing growth in China and as a string of US data showed the world's largest economy had been hit by cold weather.
Tuesday's New York manufacturing and US housing data were the latest numbers out of the United States to disappoint investors, increasing pressure on the dollar, which hit its lowest level for the year against a basket of currencies, before regaining some ground.
The numbers bolstered the case for the Federal Reserve to be patient in its tapering of its huge bond-buying programme, ahead of the release of minutes from its January policy meeting when it opted to trim asset buying by another $10 billion. The minutes are due at 1900 GMT on Wednesday.
Earlier this month, new Fed Chair Janet Yellen indicated that the central bank was still inclined to keep tapering.
In other markets, European equities were in a hesitant mood as investors kept a wary eye on interest rates in China.
"Outlook wise, we continue to remain fairly constructive on gold over the short-term, although we have to suspect that the bulk of the price climb is likely behind us," INTL FCStone analyst Edward Meir said in a report.
Holdings of the largest gold-backed exchange-traded fund(ETF), New York's SPDR Gold Trust, fell 0.63 per cent on Friday from Thursday, and the largest silver-backed ETF, New York's iShares Silver Trust, decreased 0.59 per cent during the same period.
Premiums for gold bars in Hong Kong were steady at $1.30 to $1.70 an ounce over the spot London prices.
Silver fell 0.4 per cent to $21.79 an ounce.
Premiums for gold bars in Hong Kong were steady at $1.30 to $1.70 an ounce over the spot London prices.
Silver fell 0.4 per cent to $21.79 an ounce.
Platinum lost 0.1 per cent to $1,417.94 an ounce, while palladium was up 0.1 per cent to $734.47 an ounce.
The platinum market was also awaiting a joint briefing of the chief executives of the world's top three platinum producers at 1300 GMT as a strike over wages at their operations in South Africa grinds on.
